A residential construction company is a construction company that builds and sells residential properties. A residential property can be a single-family home, a condominium, townhome, apartment building, manufactured home, or a multi-unit building. It’s considered residential if it is primarily used for dwelling and not a business. A residential construction company doesn’t build commercial buildings.
A developer or property owner may hire a residential construction company to build a house or to build a property to rent or sell. Developers often hire residential construction companies to manage all aspects of their construction project from hiring contractors and subcontractors, to ensuring safety standards and codes are upheld. They might even make planning recommendations.
If you’re planning on building a home or residential community, we reviewed more than a dozen residential construction companies based on reviews, cost, types of projects, regions served, and more to help you pick the best one for your project.
The 6 Best Residential Construction Companies
Best Overall: Lennar Corp
Why We Chose It: We chose Lennar Corp as our best residential construction company because of its longstanding industry reputation, affordable upgrade options, and skilled craftsmanship. The company also builds homes in 21 states at a variety of price points.
Has its own mortgage lender business
Website tools including an affordability calculator
Dedicated customer service team
Not available in all states
You can’t build a Lennar home on a lot you already own
They're a large company so you may not get the personalization of a smaller firm
Founded in Miami, Florida, in 1950, Lennar Corp is one of the largest U.S. homebuilders and covers more than 75 major real estate markets. It’s considered a reputable industry leader that builds quality new construction homes and is our choice for best overall because it’s part of a family of companies including a mortgage broker, title company, and insurance agency, making it an easy one-stop-shop for buyers.
Although the average Lennar home sales price is $393,000, the company builds moderately-priced homes as well as luxury communities, meaning there are varying price points for different buyers. Prices are also reflective of the region and vary greatly throughout the U.S., so make sure you consider land costs, building costs, permits, and wages in that area.
The company is easy to contact on their website and when you purchase a home, you receive a dedicated customer service team. They also have helpful information on the home buying process and what to expect as you buy or build a home.
Lennar has mixed reviews with some customers loving their new homes and customer service, but others complain about building quality.
Runner-Up, Best Overall: Toll Brothers
Why We Chose It: Toll Brothers is our choice for runner-up to best overall residential construction companies because of its 50 years of experience, the fact that it builds homes in 23 states, and its relationships with strong trade partners. It’s also known for having high building standards.
Focus on unique architectural details and luxury finishes
You can get a home built on land you already own
Hands-on design studio appointments with consultants
Higher price points than other residential construction companies
Not available in all states
Prices on homes aren’t usually negotiable
Toll Brothers was started in 1957 in Fort Washington, Pennsylvania. It’s a Fortune 500 company and one of the nation’s leading homebuilders. It’s our choice as runner up for best overall residential construction company because, in addition to building homes, it operates its own mortgage, title, land development and sale, architectural, landscape, and engineering subsidiaries.
Unlike Lennar which builds homes at varying price points, Toll Brothers focuses on the upper end of the residential market. The average Toll Brothers home sells for $895,900 but some of that is attributed to the fact that the homes it builds are generally in more expensive areas of the U.S.
The company can be easily contacted through its website and also has a phone directory by state to help you get in touch with the right person.
Toll Brothers has an A+ rating with the Better Business Bureau and is accredited. However, the company does have mixed reviews, with some quality and customer service complaints.
Best for Energy Efficient Homes: Meritage Homes Corp.
Why We Chose It: We chose Meritage Homes Corp as our best residential construction company for energy-efficient homes because every home they build is 100% Energy Star certified, the government-backed designation for energy efficiency.
Utility savings including water, heating, and cooling
Healthier homes with Smart technology
35 years of building history with an emphasis on giving back
Only builds homes in nine states
Only builds single-family detached homes and active adult communities
Luxury homes are only available in Arizona
Founded in 1985 in Scottsdale, Arizona, Meritage Homes Corp is our choice for best for energy-efficient homes because it builds eco-friendly homes at affordable prices. It has its own in-house mortgage company and in 2020 became the first national builder to become Indoor airPLUS qualified as every Meritage home comes with high-performance filters. It builds single-family homes in nine states and it has a division that builds luxury homes in Arizona.
The average sales price of a Meritage Home is $384,000, making it one of the more affordable builders for new construction. Customer service can be reached through their website, and they also offer live chat and have dedicated customer service reps throughout the entire home buying process.
Meritage Home Corp is accredited by the Better Business Bureau and has an A+ rating. However, it does have some negative reviews and complaints. Customers like how affordable the homes are but some have complained about the closing process and home warranties.
Best for First Time Buyers: LGI Homes
Why We Chose It: LGI Homes is our top pick for first-time homebuyers because it offers affordable homes, low down payment loan programs, and closing cost assistance to qualified buyers. It also specializes in turning renters into homebuyers and has special customer service teams dedicated to meeting the needs of first-time homebuyers.
Low down payments
Closing cost assistance
Only lend in 19 states
Doesn’t build multi-family properties
No luxury homes
LGI Homes was founded in 2003 in The Woodlands, Texas, and focuses on entry-level housing near major metropolitan areas including Houston. It also builds single-family homes in 18 other states. We selected it as our choice for best for first-time buyers because it offers personalized customer service each step of the way, affordably-priced homes, and loan programs with low down payments. Additionally, it has increased its emphasis on energy efficiency in its homes while continuing to provide value and consistency.
Besides new construction homes, LGI Homes also sells move-in-ready homes. These are convenient if you’re in a hurry to move or if you want to get an idea of the type of homes the company builds. LGI home prices typically range from $166,000 to $356,000. LGI Homes prides itself on boutique-style customer service for each customer and, as a result, representatives are easy to reach through their website or state directory.
LGI Homes has mixed reviews, with some customers applauding the quality style homes and responsive customer service team, and others complaining about false advertising.
Best Affordable Option: D.R. Horton
Why We Chose It: D.R. Horton is our choice for the best affordable residential construction company because it has an entire division, Express Homes, dedicated to affordable homes.
Large offering of affordable homes
Dedicated customer service teams
Homes for every stage of your life
Doesn’t build in every state
Only offers single-family homes
Multiple customer complaints about home warranties
D.R. Horton was founded in 1978 and has built almost half a million homes since then. It started in Fort Worth, Texas, and has expanded to 61 markets spread out over 19 states. It’s our pick for the best affordable option because it considers itself America’s builder, putting a focus on value so that more people can afford to own newly-built single-family homes.
D.R. Horton has multiple brands intended to suit different stages of life. For example, the Express Homes are geared towards first-time homebuyers and are affordable, built to last, and include robust warranties. Emerald Homes offer more luxurious finishes and spacious interiors. Lastly, the Freedom Homes are designed to be more compact and low maintenance for retirees or anyone looking to downsize. They’re designed to cost less to maintain and less in monthly utility bills. The average new construction home price for D.R. Horton is $302,300.
D.R. Horton has some negative reviews and customer complaints. However, despite those, it was named #1 builder by Builder Magazine for 12 consecutive years.
Best for Custom Projects: Schumacher Homes
Why We Chose It: We chose Schumacher Homes as our best residential construction company for custom projects because that is the company’s primary focus. They have design studios in 14 states and help homebuyers build the custom home of their dreams.
Assist with all steps of building a custom home
Help you find land to build on
Dedicated team of specialists including designers
Only available in 14 states
More expensive than a non-custom home
Longer time frame than a non-custom home
Schumacher Homes was started in the 1990s in Canton, Ohio, and it’s our choice for best custom homes because it exclusively focuses on building custom homes. It has showcase homes in the regions that it builds in so you can get an idea of what your home might look like as well as decide what you do and don’t want in your home. And, if you don’t already own land, they have a program that helps you find some to build on.
The company focuses on design, freedom, flexibility, and affordability; its new line of energy-efficient homes cost $81–$93 per square foot to build. The homes are typically between 1,100 and 3,400 square feet, which means that a smaller home will cost between $89,100 and $102,300 to build. Although that sounds inexpensive, remember to factor in the cost of the land; the size of the lot will impact the overall cost of your home. Additional factors influencing the cost of your home include where you’re building and what features you pick.
Custom homes vary so much in prices based on what the owners choose and what part of the country they’re located in. The company has a dedicated customer service team including design consultants who are easy to reach.
Customers like the affordability of the homes, but some have had issues with warranties and customer service.
After reviewing the best residential construction companies, we found that all of the companies offer something different including regions where they build, the type of homes they specialize in, and financing options. New construction homes don’t have to be expensive and it’s also possible to purchase a newly built home if you're a first-time homebuyer or want to downsize.
Although you should pick a builder based on your needs and budget, we found that Lennar Corp was the overall best choice for residential construction due to its availability in 21 states, additional services including mortgage lending, and quality customer service.
|Best Residential Construction Companies|
|Residential Construction Company||Why We Picked it||Average Home Price|
|Lennar Corp||A reputable industry leader that builds high-quality homes||$393,000|
|Toll Brothers||It has high building standards and offers in house services||$895,900|
|Meritage Homes Corp||Every home they build is Energy Star certified||$384,000|
|LGI Homes||Low down payments and closing cost assistance||$156,000–$356,000|
|D.R. Horton||Offers affordable homes to match different stages of your life||$302,300|
|Schumacher Homes||Assists with the entire custom home building process||Varies and doesn’t include land|
Frequently Asked Questions
What Is a Residential Construction Company?
A residential construction company is a business that builds residential real estate projects. This is different from a commercial construction company that typically takes on larger commercial real estate projects. These companies generally help to design, build, and manage the project throughout the construction phase.
Examples of residential real estate projects include:
- Single-family homes
- Communities of single-family homes or townhomes
- Multi-family properties
- Apartment buildings
Who Should (or Shouldn’t) Use a Residential Construction Company?
You should consider using a residential construction company if you want to build a home but don’t have experience. You may also want to use one if you want someone to help you manage the construction process and find the land or include the land in the purchase. A residential construction company is also helpful for developers who want to invest in a project and then rent or sell it upon completion.
You shouldn’t use a residential construction company if you want to build a commercial project or prefer to buy a home that is already built.
What Type of Project Is Best for a Residential Construction Company?
Different residential construction companies specialize in different things in varying locations. However, most of them tend to focus on single-family homes. These are popular now especially because they typically offer more space and more land than a townhouse or detached house. However, residential construction companies also build multi-family properties, senior communities, and luxury developments.
How Much Does It Cost to Use a Residential Construction Company?
The costs to use a residential construction company vary based on the location where you’re building, labor costs in the area, material costs, the cost of land, and the square footage of the house. Most companies include the cost of the land and house in one purchase and prices vary from $165,000 to well over $800,000.
Other companies will only charge you for the cost to build the property and you can purchase land separately or build on your own land. Make sure you know all associated costs before signing any contracts.
How We Chose the Best Residential Construction Companies
We researched more than a dozen residential construction companies and after reviewing them we chose the best ones based on the types of projects they build, what they specialize in, their pricing, and the regions where they build. We also considered how long the companies have been in business, customer service, and what additional services they offer such as in-house financing or title companies.
All of our top picks are available in multiple regions throughout the U.S., offer unique in-house features, build a variety of homes at different price points, and have been in business for at least 15 years.
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Forbes. "Build a stronger portfolio with meritage homes." Accessed Nov. 29, 2020.
BBB. "Meritage Homes Corp." Accessed Nov. 29, 2020.
Consumer Affairs. "LGI Homes." Accessed Nov. 29, 2020.
Trustpilot. "LGI Homes." Accessed Nov. 29, 2020.
Reuters. "D.R. Horton sees 2020 home sales above estimates, shares rise." Accessed Nov. 29, 2020.
BBB. "D.R.Horton." Accessed Nov. 29, 2020.